Deciphering the True Worth of Cimpress PLC (CMPR): An In-Depth Analysis of Its Market Value
With a daily gain of 11.68% and a 3-month increase of 30.08%, Cimpress PLC (NASDAQ:CMPR) is making significant strides in the stock market. However, despite its growth, the company reported a Loss Per Share of 7.08, raising questions about its valuation. In this article, we aim to answer the question: Is Cimpress PLC (NASDAQ:CMPR) fairly valued? We invite you to delve into our valuation analysis for a comprehensive understanding of the company's worth.
Introduction to Cimpress PLC
Cimpress PLC invests in and builds customer-focused, entrepreneurial, mass-customization businesses for the long term. The company's segment includes Vista; PrintBrothers; The Print Group; National Pen and All Other Businesses. It generates maximum revenue from the Vista segment. The company's current stock price is $69.88, and based on the GuruFocus Value (GF Value) of $75.9, Cimpress PLC (NASDAQ:CMPR) is considered to be fairly valued.
Understanding the GF Value
The GF Value is a proprietary measure that represents the current intrinsic value of a stock. It is calculated based on historical trading multiples, a GuruFocus adjustment factor based on past returns and growth, and future estimates of business performance. The GF Value Line on our summary page gives an overview of the fair value that the stock should be traded at.
Based on our analysis, Cimpress PLC (NASDAQ:CMPR) is believed to be fairly valued. The current price of $69.88 per share gives Cimpress PLC a market cap of $1.80 billion. This suggests that the long-term return of its stock is likely to be close to the rate of its business growth.
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Assessing Cimpress PLC's Financial Strength
Investing in companies with poor financial strength carries a higher risk of permanent loss. The cash-to-debt ratio and interest coverage offer insights into a company's financial strength. Unfortunately, Cimpress PLC's cash-to-debt ratio of 0.1 is worse than 84.82% of companies in the Media - Diversified industry, suggesting poor financial strength.
Profitability and Growth
Investing in profitable companies, especially those with consistent profitability over the long term, is less risky. Cimpress PLC has been profitable 6 over the past 10 years. Its operating margin is 3.46%, which ranks better than 50.59% of companies in the Media - Diversified industry, indicating fair profitability.
In terms of growth, Cimpress PLC's 3-year average annual revenue growth rate is 9.5%, which ranks better than 74.9% of companies in the Media - Diversified industry. However, the 3-year average EBITDA growth rate is 1.6%, which ranks worse than 53.38% of companies in the same industry.
ROIC vs WACC Comparison
Comparing a company's return on invested capital (ROIC) to its weighted average cost of capital (WACC) is another way to evaluate its profitability. If the ROIC is higher than the WACC, it indicates that the company is creating value for shareholders. Over the past 12 months, Cimpress PLC's ROIC was 39.51, while its WACC came in at 7.59.
Conclusion
In summary, Cimpress PLC (NASDAQ:CMPR) is believed to be fairly valued. While the company's financial condition is poor, its profitability is fair. Its growth ranks worse than 53.38% of 770 companies in the Media - Diversified industry. To learn more about Cimpress PLC stock, you can check out its 30-Year Financials here.
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This article first appeared on GuruFocus.
